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Withdrawal windows and Rage quit
In MVP we implemented the traditional approach to fund exiting and profit/loss fixation.
Withdrawal of assets from the fund without additional fees and fines is possible during withdrawal periods (aka withdrawal windows). On withdrawal during the corresponding time period, the investor may burn any number of his LP tokens and receive a pro-rata portion of the fund's assets minus the performance fee (if applicable) and fund-management fee (if applicable).
When you create a vault withdrawal windows are specified as follows:
- 1.Specifies the duration of the period in days to withdraw funds (Window)
- 2.Specifies the duration of the period in days during which it is impossible to withdraw funds without additional fines (Freeze period)
The corresponding periods start on the date following the end date of the fundraising phase. The countdown begins with the freeze period.
Also, there is a Rage quit mechanism for greater protection of investors. This mechanism allows you to withdraw your assets from the fund at any time by paying Rage quit fine, which is calculated as a fraction of the LP tokens withdrawn.
This mechanism is designed to allow investors to withdraw assets from the fund if they do not agree with the voting results. After the end of any voting process, there is a period of delay before a transaction is executed (aka Transaction delay).
When you create a vault rage quit parameters are specified as follows:
- 1.Specifies the share of LP tokens that will be burned as Rage quit fine if withdrawal happens outside of the withdrawal window or during fundraising period.
- 2.Specifies the duration of the period that must pass from the end of the voting process to transaction execution (Transaction delay)
Rage Quit is applied when investor is burning his LP tokens (withdrawing his funds) from the vault outside of the withdrawal window or during fundraising period to balance the incentives between the manager and investors.
Rage quit fine is provided as compensation to fund participants for unplanned withdrawals, which in some cases may disrupt the fund's strategy implementation.
Rage Quit Mechanics and calculation
When a user is paying Rage Quit fine, this rage quit fine is distributed among all Vault participants and not the profit of the manager. So, for example, when the user is paying a 10% Rage Quit fine from his deposit, this value is being distributed among all Vault members proportionally to their LP tokens holdings.
Last modified 8mo ago